Airline Stock Roundup: DAL's Q3 Earnings Beat, JBLU's Traffic Report & More

In the past week, Delta Air Lines, Inc. DAL kick-started the third-quarter earnings season for the airline space. This Atlanta, GA-based carrier reported better-than-expected earnings per share but lower-than-expected revenues. Despite a 35% rise in adjusted fuel bill, the bottom line increased on a year-over-year basis in the reported quarter.

On the traffic front, Alaska Air Group, Inc. ALK, JetBlue Airways Corporation JBLU and Copa Holdings, S.A. CPA disclosed their respective traffic figures for September. Load factor (% of seats filled by passengers) declined at all the three above-mentioned carriers as capacity expansion outweighed traffic growth. The development is not favorable, as woes related to capacity overexpansion had hurt airline stocks previously.

On the price front, the NYSE ARCA Airline Index declined 1.1% over the past week, despite Delta’s earnings beat.

(Read the last Airline Stock Roundup for Oct 10, 2018)

Recap of the Past Week’s Most Important Stories

1. Delta’s earnings (excluding 11 cents from non-recurring items) of $1.80 per share surpassed the Zacks Consensus Estimate by 6 cents. Operating revenues came in at $11,953 million, marginally missing the Zacks Consensus Estimate of $11,956.9 million. However, the top line increased 8% from the year-ago figure. Strong demand for air travel boosted revenues (read more: Delta Beats on Q3 Earnings Despite High Fuel Costs).

Delta carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

2. At JetBlue traffic (measured in revenue passenger miles or RPMs) improved 18.5% year over year to 3.9 billion. On a year-over-year basis, capacity (or available seat miles/ASMs) climbed 19.3% to 4.9 billion. At the end of the first nine months of 2018, JetBlue generated RPMs of 38.3 billion (up 7.2% year over year) and ASMs of 44.7 billion (up 6.1% year over year) (read more: JetBlue's September Traffic Increases, Load Factor Down).

3. Copa Holdings reported a 6.5% increase in September traffic. With traffic growth being outpaced by capacity expansion (10.8%), load factor contracted 330 basis points to 80.8% in the month.

4. At Alaska Air Group, traffic increased 0.6% while capacity expanded 3.2% in September. Load factor decreased to 80.8% from 82.9% a year ago. Backed by strong demand for air travel, the company transported 1.1% more passengers in the month. On-time arrivals (mainline) increased to 85.2% from 83.9% registered a year ago.

Price Performance

The following table shows the price movement of the major airline players over the past week and during the past six months.

 

 

The table above shows that most airline stocks traded in the red over the past week resulting in the NYSE ARCA Airline Index declining. Over the course of six months, the sector tracker decreased 15% due to headwinds like high fuel costs. As was the case over the last week, Latin American carriers, Copa Holdings and  GOL Linhas Aéreas Inteligentes S.A. GOL emerged as the major laggards over the past six months.

What's Next in the Airline Space?

Investors will look forward to third-quarter earnings reports from JetBlue and Hawaiian Holdings, Inc. HA on Oct 23.

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JetBlue Airways Corporation (JBLU) : Free Stock Analysis Report
 
Delta Air Lines, Inc. (DAL) : Free Stock Analysis Report
 
Alaska Air Group, Inc. (ALK) : Free Stock Analysis Report
 
Hawaiian Holdings, Inc. (HA) : Free Stock Analysis Report
 
Copa Holdings, S.A. (CPA) : Free Stock Analysis Report
 
Gol Linhas Aereas Inteligentes S.A. (GOL) : Free Stock Analysis Report
 
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